Oversea-chinese Banking Corporation Limited · SGX:O39
Oversea-chinese Banking — Investor Presentation (February 2009)
43 slides from Oversea-chinese Banking's investor presentation, Feb 18, 2009
Slide 1: New Horizons II Report Card
Presentation to Media and Analysts New Horizons II Report Card 18 February 2009 1
Slide 2: Agenda
Agenda • Recap - New Horizons II • Highlights of Our Achievements in 2008 Customers Products Risk Management Productivity People Shareholder Value Overseas Expansion • Appendix: Detailed Report Card 2
Slide 3: New Horizons II: Recap
New Horizons II: Recap 1. Focused Overseas Expansion Shift emphasis from adding more country flags to deepening market penetration in Malaysia, Indonesia, China Selectively explore opportunities to establish strategic partnerships in Indochina Grow market share in the consumer and SME segments
Slide 4: New Horizons II: Recap
New Horizons II: Recap 2. Improving our performance through a Balanced Business Scorecard Customers Products Risk Management Productivity People Shareholder Value 4
Slide 5: Agenda
Agenda • Recap - New Horizons II • Highlights of Our Achievements in 2008 Customers Products Risk Management Productivity People Shareholder Value Overseas Expansion • Appendix: Detailed Report Card 5
Slide 6: Customers – Consumers
Customers – Consumers • Healthy growth in number of customers +11% in targeted segments and new markets • 14% drop in AUM per mass customer in +10% Singapore due to customer acquisition +2% +7% and depressed equities market +9% • Leveraged customer insights to further strengthen differentiation 2004
Slide 7: Customers – Businesses
Customers – Businesses • Sustained growth in SME customer +15% base with 9% increase in revenues +6% +15% +3% +2% • Cross-sell ratio declined 7% as asset revenues growth of 20% outpaced non- asset revenues growth of 6% 2004 2005 2006 2007 2008 • Continued differentiation with # of SME Customers inno
Slide 8: Product Innovation
Product Innovation • Innovation index lower at 7.2%. Absolute revenues from new products 130% from 2003 83 84 78 58 61 66 • Continued recognition for our improved product capabilities Best SME Cash Management Solution 2003 2004 2005 2006 2007 2008 Bank (The Asset) and Best Cash # of New Products M
Slide 9: Risk Management
Risk Management • Adoption of Basel II since 1 Jan 2008 S&P Moody’s Fitch Pillar 1 2008 A+ Aa1 AA- – AIRB Approach for major retail portfolios 2007 A+ Aa1 AA- – FIRB Approach for major corporate 2006 A+ Aa3 AA- portfolios 2005 A+ Aa3 AA- – Standardized Approaches for operational risk and market ri
Slide 10: Productivity
Productivity • Productivity gains of 10% and unit cost reductions of 5% across 15 operations 44.0% factories in Singapore and Malaysia 41.4% 41.1% 40.1% 39.6% 39.6% • Two work streams completed hubbing into Malaysia; projected incremental savings of >SGD12 million over 10 2003 2004 2005 2006 2007 20
Slide 11: People
People • Employee engagement score up +8% 29% since 2002 +6% +5% +5% +4% • Employee shareholding rose to +1% 53% 2003 2004 2005 2006 2007 2008 Employee Engagement Score Improvement • Average training days per staff was maintained at a high level, 56% above annual target 53% 10% 12% 29% 39% 31% 2003
Slide 12: Shareholder Value
Shareholder Value 13.4% 11.8% • Challenging operating environment 11.4% 10.3% resulted in decline in core ROE from 9.9% 13.4% to 9.9% • Core EPS fell 23% vs 10% growth target 2004 2005 2006 2007 2008 • Maintained dividend at 28 cents per ROE excl divestment gains share, dividend payout increased to
Slide 13: Overseas Expansion
Overseas Expansion Malaysia • OCBC Al Amin established with first branch opened in Petaling Jaya Indonesia • Continued network expansion at Bank NISP (added 24 branches and 45 ATMs); total network of 370 branches and 537 ATMs • Re-branding as OCBC NISP 2,447 China • Obtained regulatory approval to o
Slide 14: In a Nutshell
In a Nutshell • Achieved good progress in most of our scorecard objectives despite a difficult year • Overseas expansion efforts are progressing well • Key shareholder value targets (ROE, EPS) not met due to challenging operating environment • In spite of setbacks, our strategic plan remains valid a
Slide 15: Agenda
Agenda • Recap - New Horizons II • Highlights of Our Achievements in 2008 Customers Products Risk Management Productivity People Shareholder Value Overseas Expansion • Appendix: Detailed Report Card 15
Slide 16: Our Achievements – Consumers (continued)
Our Achievements – Consumers (continued) OUR ACTION PLANS PROGRESS 1. Focus on acquiring and doing • Healthy growth in number of customers in targeted more with customers segments and new markets B 11% growth in total OCBC consumer customers B 24% growth in Premier and Private Banking customers B Tr
Slide 17: Our Achievements – Consumers (continued)
Our Achievements – Consumers (continued) OUR ACTION PLANS PROGRESS 2. Deepen and deploy customer • Customer analytics competences regionalized in insights into new and enhanced Chengdu and integrated platforms implemented Value Propositions across S’pore & M’sia • Mighty Savers programme expanded in
Slide 18: Our Achievements – Consumers (continued)
Our Achievements – Consumers (continued) OUR ACTION PLANS PROGRESS 3. Refresh OCBC’s Branding through • Another 522 staff trained in Building Emotional Service Excellence and Engagement (BEE) skills across S’pore and M’sia; rolled Convenience out new BEE courses on effective coaching for >150 Servic
Slide 19: Our Achievements – Consumers (continued)
Our Achievements – Consumers (continued) OUR ACTION PLANS PROGRESS • Established full-fledged Islamic Banking subsidiary, OCBC Al-Amin, with flagship Branch in Petaling Jaya • Added 39 more ATM & other machines (total 613) • Launched mobile banking in Malaysia & new OCBC Mobile Ready branding; activ
Slide 20: Our Achievements – Consumers (continued)
Our Achievements – Consumers (continued) OUR ACTION PLANS PROGRESS • Selected 2008 Accolades • Top Local Bank for the finance industry in the inaugural 2008 Customer Satisfaction Index of Singapore • Ranked 2nd for Best Retail Bank in S’pore (The Asian Banker) • Excellence in Mobile Phone Banking (T
Slide 21: Our Achievements – Consumers (continued)
Our Achievements – Consumers (continued) OUR ACTION PLANS PROGRESS 4. Leverage our Great Eastern / Lion • Maintained No. 1 position in Bancassurance Capital partnership to cross-sell more • Agency force’s mortgage sales increased >60% products contributing 8% of the bank's total volume • Focused on
Slide 22: Our Achievements – Businesses
Our Achievements – Businesses OUR ACTION PLANS PROGRESS 1. Grow our current strong large • 23% growth in total revenues from large corporate business corporate position (Singapore & Malaysia) 2. Expand our customer base and • 15% growth in number of SME customers, including China grow market share i
Slide 23: Our Achievements – Businesses (continued)
Our Achievements – Businesses (continued) OUR ACTION PLANS PROGRESS • Another 116 staff trained in Building Emotional Engagement (BEE) skills across S’pore and M’sia • 11 recipients (1 STAR, 5 Gold, 5 Silver) for Excellent Service Awards (EXSA); our staff also won the Super Star Award for the bankin
Slide 24: Our Achievements – Businesses (continued)
Our Achievements – Businesses (continued) OUR ACTION PLANS PROGRESS Become one of the top 3 Global Corporate Banking revenue grew corporate banks in the 20% in 2008, loans grew 31% combined Singapore and Malaysia market 24
Slide 25: Our Achievements – Product Innovation
Our Achievements – Product Innovation OUR ACTION PLANS PROGRESS 1. Strive to build “best in class” • Best SME Cash Management Solution Bank (The Asset) products and Best Cash Management Solution in SE Asia (Alpha SE Asia) • Best Cash Management Bank (FinanceAsia & Alpha SE Asia) • Best Foreign Cash
Slide 26: Our Achievements – Product Innovation (continued)
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS 2. Add to our SME Cash management • Launched various new products / services to better meet capabilities and enhance our trade SME customers’ needs finance services / solutions with Singapore increasing focus on supporting o
Slide 27: Our Achievements – Product Innovation (continued)
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS • Launched various new products / services to better meet SME customers’ needs (cont’d) China B Velocity@ocbc in China, available in both Chinese and English languages • Continued growth in velocity@ocbc usage B Singapore: N
Slide 28: Our Achievements – Product Innovation (continued)
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS 3. Strengthen our position in • Ranked 1st in Singapore syndicated loans and Singapore, Malaysia and Indonesia Singapore dollar bonds, and 2nd in Malaysia syndicated for investment banking products and loans by IFR Asia expa
Slide 29: Our Achievements – Product Innovation (continued)
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS 5. Be the bank of choice for treasury • Ranked 1st in Singapore Dollar denominated categories instruments in selected currencies by Asia Risk End User Survey 2008 Ö No. 1 in SGD Currency Forwards Ö No. 1 in SGD Currency Opti
Slide 30: Our Achievements – Product Innovation (continued)
Our Achievements – Product Innovation (continued) OUR ACTION PLANS PROGRESS 6. Be one of the top 3 banks in the • Maintained No. 1 position in Bancassurance for the Combined Singapore/ Malaysia past 8 consecutive years market for Wealth Management, • 14% growth in wealth management fee income across
Slide 31: Our Achievements – Risk Management
Our Achievements – Risk Management OUR ACTION PLANS PROGRESS 1. Execute our Basel ll implementation • Adopted Pillar 1 Internal Ratings Based Approach plan in line with regulatory guidelines (IRBA) for more than 80% of credit portfolios, and Standardized Approaches for Operational Risk and Market Ri
Slide 32: Our Achievements – Risk Management (continued)
Our Achievements – Risk Management (continued) OUR ACTION PLANS PROGRESS 3. Strengthen risk management • Continue to build the team to strengthen portfolio capabilities to support Group’s analytics for better credit risk management and market expansion into new markets & products risk management to
Slide 33: Our Achievements – Productivity
Our Achievements – Productivity OUR ACTION PLANS PROGRESS 1. Continue to drive for productivity gains • Productivity gains of 10% and unit cost reductions of 5% and unit cost reduction while across 15 S’pore & M’sia product processing factories enhancing service quality @ Account Services, Investmen
Slide 34: Our Achievements – People
Our Achievements – People OUR ACTION PLANS PROGRESS 1. Build people resources with a focus on • Another 84 employees given cross-border assignments diversity, cross border management to / from Singapore, Malaysia, Indonesia, China, Japan, skills and competencies to support our UK, Australia (increas
Slide 35: Our Achievements – People (continued)
Our Achievements – People (continued) OUR ACTION PLANS PROGRESS 4. Continue to improve employee • Expanded enrolment capacity at The Little Skool-House satisfaction so as to be increasingly (childcare center in OCBC Center) by 20% and recognised as a regional employer of incorporated an outdoor play
Slide 36: Our Achievements – Shareholder Value
Our Achievements – Shareholder Value OUR ACTION PLANS PROGRESS 1. Grow revenues faster than expenses • Core revenue grew 1%, expenses rose 10% (excluding GEH, revenue rose 11%, expenses rose 10%) 2. Deliver 10% EPS growth per annum • Core EPS declined by 23% 3. Achieve and sustain ROE of above • Cor
Slide 37: Our Achievements – Shareholder Value (continued)
Our Achievements – Shareholder Value (continued) OUR ACTION PLANS PROGRESS 6. Continue to divest non-core assets at • Divested remaining shares in Straits Trading and Robinsons the right time and invest the gains in for a total gain of S$174m core financial services growth • Increased stake in Pacif
Slide 38: Our Achievements – Overseas Expansion (Indonesia) (continued)
Our Achievements – Overseas Expansion (Indonesia) (continued) OUR ACTION PLANS PROGRESS 1. Work with OCBC NISP to become a • Rolled out new OCBC NISP branding to reflect Bank Top Tier Nationwide bank focused on NISP's Enduring Trust & Customer Relationship, and SMEs and Consumers OCBC's Strength, St
Slide 39: Our Achievements – Overseas Expansion (Indonesia) (continued)
Our Achievements – Overseas Expansion (Indonesia) (continued) OUR ACTION PLANS PROGRESS 2. Broaden OCBC NISP’s Consumer • Soft launched Liquid Platinum credit card; key features and SME product suite, including include regional privileges across > 500 merchants, dual Wealth Management, Credit Cards,
Slide 40: Our Achievements – Overseas Expansion (China)
Our Achievements – Overseas Expansion (China) OUR ACTION PLANS PROGRESS 1. Leverage on strategic partnership in • 2008 is the second year of Bank of Ningbo’s (BoN) strategy China as part of strategy to grow our to train 100 management staff within 5 years with OCBC. 18 retail and SME customer franch
Slide 41: Our Achievements – Overseas Expansion (China)
Our Achievements – Overseas Expansion (China) OUR ACTION PLANS PROGRESS 4. Develop our customer portfolio based • Grew retail customer base by over 230%, using on defined business value reinforced “family focused bank“ concept, which includes propositions for both corporate and family oriented solut
Slide 42: Our Achievements – Overseas Expansion (Vietnam)
Our Achievements – Overseas Expansion (Vietnam) OUR ACTION PLANS PROGRESS 1. Work with VP Bank to build • Successfully acquired an additional 5% stake in VP Bank Capabilities in Customer and Product • Commenced Technical Assistance program focusing solutions initially on Credit Risk Management and T
Slide 43: Thank You
Q Ask OCcBC Thank You &) ocBc Bank 43
Oversea-Chinese Banking — Investor Presentation (February 2009) on 6ix